How To Handle Debt And Get Back On Track
Published on 2/2/2021
Did you shell out more money than you expected to this past holiday season? Are you feeling a budget crunch rolling into February? According to Magnify Money by LendingTree, you're in good company. More than a third (31%) of all consumers took on debt to pay for expenses in December 2020.* So, how do you get back on track? Here are some things you can do:
Start with your budget. Don't have one? Now's a great time to create a budget. For a quick how-to, watch this video. If you already have a budget, re-evaluate it. Then, make a list of all your debts — include who and how much you owe, interest rate and status (whether your on-time or late). It is important to know exactly where you stand.
Orlando Credit Union Hack #1: Whip your budget into shape with the Money Management tool available inside online banking. View your accounts with Orlando Credit Union and your accounts with other financial institutions, so you can get a complete picture (literally) of how you save and spend money. Find out what your net worth is, monitor your spending and predict your cash flow. Take time to set up your information now and refresh the information by clicking a button when you want an update. Sure beats tracking your budget on paper or even spreadsheet, for that matter. Understanding where your money is the first step. From there, you can set personal goals to help you achieve financial success.
Determine a debt-reduction plan that will work for you. You can choose the snowball method, the avalanche method or a combination of both. The snowball method is a debt strategy whereby you pay off your smallest to largest debt; you gain momentum as you pay off each small debt, rolling the money you were paying on that debt to the next largest debt until you have paid off your debts completely. The avalanche method is a debt strategy whereby you pay down the debt with the highest interest rate first, making minimum payments on all of your lower interest debts and paying extra toward your debt with the highest interest rate until it is gone.
Orlando Credit Union Hack #2: Use the Money Management tool debt calculator to find the best method to pay off your debt that works with your budget and helps you see progress.
Automate your debt repayment. If paying down your debt is challenging, set up automatic payments when you can. Not only will you be less likely to forget your due date, but it may take away some of the drudgery of making your payments.
Orlando Credit Union Hack #3: Schedule recurring payments using your Orlando Credit Union online banking or mobile app.
Consolidate your high-rate debts. Find a low-rate debt consolidation loan to roll your debts into, so you can make only one payment each month. Or, consider transferring high-rate credit card balances onto a lower rate credit card using a balance transfer; many financial institutions have special offers during this time.
Orlando Credit Union Hack #4: Consider our low-rate Debt Consolidation Loan or transfer your high-rate credit card balances to an Orlando Credit Union Visa® Platinum Credit Card. Check out our promotional offers.
Get a credit check up. Having a healthy credit score is an important part of your financial well-being. Make it a habit to review your credit report at least once a year. Every twelve months individuals can go to AnnualCreditReport.com to pull a free credit report from Experian, Equifax and Transunion. This is a free site mandated by the Federal Government. Once you download your reports, review them to make sure that they are accurate and up-to-date. Regular reviews can assist you in understanding what you may be able to do to raise your score such as making on-time payments and also alert you of possible identity theft.
Orlando Credit Union Hack #5: Not sure what your credit report means or how to get back on track? Get a free credit review to help you devise credit-building strategies. Orlando Credit Union has partnered with GreenPath to offer a confidential, financial wellness program with extended hours. Whether you're looking to improve your credit or need help budgeting, a live counselor is a click away.
Use extra money wisely. Getting a raise? Getting a tax refund or other unexpected money? Don't blow it on Amazon or the latest techno-gadget. Instead, squirrel it away in a savings or investment account or use it to pay extra on your outstanding debt.
Orlando Credit Union Hack #6: Wondering what your tax refund is going to be? Simply log in to TurboTax and see. You can complete your taxes in TurboTax to get a sense of what your refund or payment will be. Keep in mind you do not pay a fee, unless you submit your taxes to the IRS.